Investing.com - The Australian dollar traded lower against its U.S. rival during Monday’s Asian, backing off five-month highs even as traders bet the Federal Reserve is not going to trim its asset-buying program in the near-term.
In Asian trading Monday, AUD/USD fell 0.12% to 0.9665. After soaring more than 2.1% last week, the pair is likely to find support at 0.9526, the low from October 17 and resistance at 0.9759, the high from June 4.
The Aussie jumped last Friday after official data showed that China’s economy expanded at an annual rate of 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.
A separate report showed that industrial production in China rose by an annualized rate of 10.2% in September, exceeding expectations for a 10.1% increase, after a 10.4% rise the previous month. China is Australia’s largest trading partner.
It is expected the Aussie will continue its recently bullish ways because traders believe the Fed will not pare its USD85 billion-a-month bond-buying program until sometime next year, perhaps well into the second quarter at the earliest.
It is estimated the recent shutdown cost the U.S. economy, the world’s largest, hundreds of millions of dollars per day in lost economic output.
Conventional wisdom dictates that will be reflected in the fourth-quarter GDP reports that will not be revealed until the first quarter of 2014. Traders are speculating that the Fed will not be able to taper its USD85 billion-a-month bond-buying program until March 2014 at the earliest.
Even that does not seem likely because that would mean one of Janet Yellen’s first acts as Fed chair, assuming she is confirmed to replace Ben Bernanke, would be to trim the Fed’s bond-buying efforts that she supported. Bernanke stays on through the end of January 2014.
Elsewhere, AUD/JPY inched up 0.04% to 94.66 while AUD/NZD nudged higher by 0.04% to 1.1381.
In Asian trading Monday, AUD/USD fell 0.12% to 0.9665. After soaring more than 2.1% last week, the pair is likely to find support at 0.9526, the low from October 17 and resistance at 0.9759, the high from June 4.
The Aussie jumped last Friday after official data showed that China’s economy expanded at an annual rate of 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.
A separate report showed that industrial production in China rose by an annualized rate of 10.2% in September, exceeding expectations for a 10.1% increase, after a 10.4% rise the previous month. China is Australia’s largest trading partner.
It is expected the Aussie will continue its recently bullish ways because traders believe the Fed will not pare its USD85 billion-a-month bond-buying program until sometime next year, perhaps well into the second quarter at the earliest.
It is estimated the recent shutdown cost the U.S. economy, the world’s largest, hundreds of millions of dollars per day in lost economic output.
Conventional wisdom dictates that will be reflected in the fourth-quarter GDP reports that will not be revealed until the first quarter of 2014. Traders are speculating that the Fed will not be able to taper its USD85 billion-a-month bond-buying program until March 2014 at the earliest.
Even that does not seem likely because that would mean one of Janet Yellen’s first acts as Fed chair, assuming she is confirmed to replace Ben Bernanke, would be to trim the Fed’s bond-buying efforts that she supported. Bernanke stays on through the end of January 2014.
Elsewhere, AUD/JPY inched up 0.04% to 94.66 while AUD/NZD nudged higher by 0.04% to 1.1381.